You can protect your business, prevent chargebacks and avoid the loss of data. To do so, you need to first understand the three different types of fraud: stolen financials, account takeover, and friendly fraud. With this knowledge in hand, you can then implement basic fraud tools like address verification software (AVS) and card verification data or value (CVD or CVV) to eliminate the problem. Once you have the basic fraud tools implemented, you can explore more advanced fraud defense strategies such as wallets. Are you ready to start protecting your business?

The Different Types of Fraud

Stolen financials are when credit card details are obtained and used to make purchases. Stolen financials are responsible for 93 percent of fraud.

Account takeover is when a person gains control of someone else’s account and makes a purchase. Account takeover accounts for 5 percent of fraud.

Friendly fraud is when a cardholder or family member purchases items and requests a chargeback after he or she receives the goods. It accounts for about 2 percent of fraud.

Basic Fraud Tools

They may be basic and free, but that doesn’t mean they aren’t powerful. In the case of stolen financials, the person committing the fraud usually only has the credit card number, not the physical card. Something as simple as asking for the CVD/CVV (the three- to four-digit code found on the back of a credit card) will prevent this.

This soon won’t even be a choice, as major card providers are making it mandatory for merchants to collect the CVD. Visa is requiring all new merchants to collect CVD on all card-not-present transactions. Existing merchants will have until October 2018 to make the changes. Smart businesses aren’t waiting, and are making the change proactively to start collecting CVD on all online payments now.

AVS can also protect your business from carding, as it requires the purchaser to enter the mailing address that matches what’s on record with the credit card company. Simple? Yes, but effective, as fraudsters often don’t have access to this information.

New Solutions

Now we get to the latest and greatest in fraud defense, wallets. Wallets such as Visa Checkout, MasterPass, Apple Pay, and Android Pay are changing online payments for the better. They’re handling authentication for you, taking the majority of the burden away. Incorporating wallets into your checkout will help combat stolen financials and account takeover.

If your business is online, it’s important to have a suite of fraud tools working to protect it. Incorporating wallets will take your checkout to the next level, and allow you to breathe easier knowing the authentication process is out of your hands.

Even with every tool in the market, you may still experience payment fraud, so it’s important to continue to stay up-to-date with the latest payment and security trends. Protect your business, protect yourself, and don’t wait until it’s too late.

Ryan Stewart is chief commercial officer for Bambora North America, a collection of companies with decades of experience in the payments industry.

Read the full article at Total Retail here: http://www.mytotalretail.com/article/dont-let-fraudulent-payments-be-a-deterrent-to-e-commerce-success/